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Innovation in the Digital Age


Not long ago the subject of innovation in manufacturing was considered a bit of an oxymoron to many leaders in business and government as they chose not to invest in our manufacturing base. If anything good is to come from the economic events in recent years, it's that many in America once again discovered the value of a manufacturing economy that can compete in today's global economy.

"digital graphics" courtesy of flickr's Steve JohnsonAmerica's national and economic security — and our ability to create wealth and new jobs — depend on a robust and adaptive manufacturing ecosystem. An ecosystem that supports the generation and translation of ideas into high-value goods and services. An ecosystem powered by innovation, that is equally capable of serving US and global markets.

Manufacturing accounts for the majority of the R&D and productivity growth in the US economy, and contributes a large share to total gross domestic product. If we lose the ability to manufacture, we will surely lose the ability to design, the ability to innovate, and the ability to shape our future. Without a strong manufacturing base, the United States cannot be a global economic and technological leader, nor can it fully recover from recent economic crises.

Collaboration, innovation and commercialization — these actions will reinvigorate and revive our manufacturing base. This means recognizing what has changed already, and identifying the still-needed actions necessary to transform our skills and meet our competitiveness challenges. The President sees this as evidenced by his announcement last month of the Advanced Manufacturing Partnership, AMP.

How Collaborative R&D Revitalizes American Manufacturing

The National Center for Manufacturing Sciences, NCMS, has been the leader in collaborative research and development for over 25 years, and our model is quite straightforward: Collaborate, Innovate, Commercialize. These three words represent the spectrum of activity from idea to solution to implementation.

Though "Collaboration" comes first in NCMS' philosophy, you can't understand its value without understanding the other two drivers, innovation and commercialization.

When R&D is performed, the desired outcome might be a new product, technology or process. But we can simplify that by saying good R&D produces innovations. Innovation represents everything that is desirable in research and development.

Innovation alone is not the end of the journey. You'd be surprised how many organizations think it is. When innovations are realized but not commercialized, R&D does not contribute immediate marketable value. Sometimes innovative ideas sit on the shelf waiting for tech transfer or commercialization to occur. Every flash of genius, every successful outcome, every hard-realized solution needs to be brought to market. R&D begets innovation, and innovation must be commercialized to be of value. The goal in manufacturing is to take a commercialized innovation and replicate it again and again perfectly in a product or process.

But none of it exists in a vacuum. Successful innovation through research and development often lies at the intersection of three critical drivers:

  • Talent — the skill, expertise, and knowledge that drives the innovation.

  • Investment — the resources required to support a R&D venture.

  • Infrastructure — facilities, resources, and tools, as well as products and processes, to apply the R&D results.

Academia and laboratories often have talent and investment but lack the infrastructure to apply for large-scale innovation. Manufacturing has demonstrated the talent and in-house infrastructure, but it lacks the connectivity of resources, and investment necessary to drive innovation into the marketplace.

Now, there is a way to leverage all three drivers, an approach that brings talent, investment, and infrastructure together as one powerful whole.

Collaborative R&D, the NCMS model, consists of four elements:

  • Bring the stakeholders to the table.

  • Manage the collaboration to optimize R&D.

  • Achieve the innovation.

  • Take it to market.

The key to unlocking these resources is collaboration. Development of collaborative partnerships with many organizations allows R&D to address common issues, aggressively innovate, and to reach the market faster. The model reduces cost and risk, as collaborative participants share and dilute these burdens through cross-industry capability. NCMS leverages the resources and infrastructure of each participant to arrive at solutions that improve the competitive standing of our manufacturing base. Participant organizations are thus able to engage in a greater range of commercialization efforts at a much lower cost than would be possible if they acted alone.

The goal of every collaborative project is the commercialization of a product or process. This is why end-users are essential in R&D projects. No amount of innovation has real worth unless it makes it into the marketplace, unless it is of value to those who will be using it. Collaborative R&D drives relentlessly toward successful commercialization of effective innovations.

Innovation is not optional. Companies cannot survive by living off the fruits of past labors. You must move to survive. And the R&D processes that can lead to innovation always have inherent risk. Through collaborative R&D, when the drive for commercialization and tech transfer remains a core objective, the risk can be greatly reduced. Lying at the intersection of Talent, Investment, and Infrastructure, R&D innovation drives the opportunities the economy needs: the opportunity to advance the cutting edge, the opportunity to ensure a bright competitive future for North American manufacturers.

Productivity and Investment

Despite much of the troubling news today, US productivity remains at an all time high. Even with the impact of globalization and increasingly more imports to the US economy, manufacturing employment is a significant percentage of GDP, and today shares many of the same characteristics seen in the agriculture industry in the early 20th century. Increasingly, agriculture, manufacturing and other material processing industries depend on sophisticated technology and innovative processes to accomplish better results more quickly, with a fraction of the labor once needed. Automation and computer-based tools have become essential components of the manufacturing toolbox needed for competitiveness. But this increased productivity has a cost. Fewer workers are now required to perform many of the tasks that were once in great demand and there are capital costs involved with the acquisition of new tools and infrastructure. Innovative solutions are necessary to reduce these costs and a significantly-better educated and retrained workforce is urgently needed to address the increasing levels of complexity.

We need that educated and better-trained workforce to be US-based. The smartest people in India, those with the top 25 percent of IQs, outnumber the entire population of the United States.* To remain competitive, our greatest asset, our talent, needs to be continuously educated. We live in a world where the amount of new technical information being produced doubles every two years.* Knowledge is essential to a competitive economy, just as much as manufacturing is.

Since the Industrial Revolution, manufacturing and the associated R&D have been continuously responsible for massive, positive economic and social changes. It is necessary to bring manufacturing back into the fold as part of a successful national wealth generation equation. A key to manufacturing's continuous growth and productivity is the steady deployment of innovative new technology through R&D investments. North America still leads the world in R&D spending, chiefly through universities and small- to medium-sized businesses. The Center for Automotive Research estimates that for every one manufacturing job, six more jobs are created by the economy in other sectors. Manufacturing jobs are a significant economic development multiplier.

In addition to these important indicators, manufacturing has also been a primary driver in the investment and build-out of our nation and every manufacturing nation's infrastructure: air, land and water transportation systems grow based on the growth of manufacturing. So does energy: hydro, electric, gas and nuclear grids depend on expansive manufacturing for their own expansion, even as this energy powers higher and higher tech manufacturing. It even impacts academia: universities are more geared to sustainability, engineering and technology for manufacturing. Manufacturing is the base, the solid foundation for every successful economy.

And as our nation reduced its investment in manufacturing, so too has it reduced its investment in infrastructure. We see the results all around us. Massive disrepair and out of date technologies — from power transfer to communications — shouldering ever greater burdens with no opportunity for upgrade. Does anyone really believe the recent investments in energy in China are based on that nation's concern for its population or the environment?

China, first and foremost, is building a manufacturing base to sustain its economy. And it needs energy to sustain its manufacturing base. Trending shows that China will soon become the number one English speaking country in the world*, striking down any remaining potential language barrier between the US manufacturing supply chain and the world's leading producer of consumer goods.

Large manufacturing OEMs that once invested heavily in R&D over the last 50 years are reducing those investments while simultaneously moving production off shore closer to new customers. Small- to medium-sized companies have increased their R&D spending seeking new solutions to global customer needs, but still lack needed infrastructure to manufacture the volumes necessary to supply global demand and thus are also outsourcing production. Outsourcing of some production seemed logical given that it makes economic sense to produce products closest to the end user in new markets. It should also be noted that more than ninety percent of all of the customers for all products are outside of the US. Much of this outsourced production began as commodity type manufacturing with less complexity and automation for products relevant to an emerging market.

This has led to a more troubling trend with the outsourcing of more and more sophisticated technologies in order to support production, meet the government demand for access to markets, and capture critical volume needed to justify cost. This reduces the economic advantage shelf life from these investments and also vacates the US ability to serve our own market with our own products now and in the future.

If we lose the ability to manufacture, we lose the ability to innovate. We lose the ability to design and develop new products and processes, the ability to create follow-on and support technologies and products. The electronics industry is a good example where the US gave away the ability to manufacture and design, resulting in the supporting industries of batteries and power supply now being based off shore.

Every day, there's more empirical data suggesting that our traditional top-down OEM supply chain model is breaking down. This antiquated model, where OEMs and tier one companies dictate technology and innovation downstream, is untenable in today's technological world. Partnership is the solution to tomorrow's challenges. Collaborative approaches realize open innovation, mass customization and shared infrastructure based on the documented success of processes pioneered by NCMS. Successful innovation with minimal risk, lowest cost, and fast time to market depends on collaboration.

Digital Manufacturing Is the Future

In the future, 90 percent of all products will be developed virtually. All factories will be required to be reusable and reconfigurable optimized for energy and water use, and most will need to be shared. Smart platforms that are data-intensive will gather vast amounts of information to control every process and then store this knowledge (probably in the cloud) for later use. Leveraging the power of high-performance computing (HPC) will be required. Today HPC is one of America's greatest — and most underutilized — competitive assets.

Let me state the value of high performance computing in another way.

HPC TELLS you what you'd otherwise have to GUESS — and does it so fast, and with such accuracy, that quaint ideas like physical prototyping and over designing will soon be as obsolete as the slide rule. If adopted throughout the entire US manufacturing base, our competitiveness in the world will be enhanced.

For a long time HPC was limited by investment expenses and required infrastructure. However, today you can quite literally have a supercomputer under your desk. The Air Force uses PlayStation 3 game consoles for top secret design research, code breaking, and encryption. Why use video game hardware for national security? Because the $300 PS3 can perform one hundred billion operations per second. Network 2,200 of them, like the Air Force did, and you can begin to see the kind of computing power that's available off-the-shelf. Today's computers don't "crunch numbers." They devour data. And when you link them together you have access to processing power that was once only available to governments and universities.

HPC is not limited to design and engineering either. Predictive computing basically takes data and reports trends and likely outcomes. Give it the right data, and it can be used for finite-element analysis, process assessments, workflows...you name it.

Now of course, you could do the same thing with a desktop computer. You could. It would take a thousand years, but you could do it. The magic of HPC is that it's so fast, so powerful, that it can give you answers in hours. Any process, product, material, or decision — imagine being told in advance what to watch out for, and what opportunities you should take advantage of.

There's really no limit to the opportunities provided by HPC. It's like having a window into the future. But despite its many advantages, HPC is still evolving and not leveraged adequately, especially in the manufacturing sector.

NCMS Predictive Innovation Centers

At NCMS we are developing a national innovation network; a knowledge infrastructure to leverage the awesome power of HPC and bring together the wealth of talent, ideas and facilities within our universities, national labs and industrial research centers. This network will consist of numerous public-private sector collaborations called Predictive Innovation Centers (PIC).

The primary goal of our Predictive Innovation Centers and this project is to make it possible for such companies to understand and affordably access these game-changing tools. When successful this will lead to more innovation, better designs, better use of materials, and more vibrant and competitive US companies.

There will always be those individuals who insist that HPC is only good for pure science, or who still believe that an immense investment is required to build high-performance computing capability. This incorrect perception feeds the ongoing challenge of adoption. if HPC is to become widely adopted, we need to shatter these misconceptions and make it possible for collaborators to access HPC tools without the need for massive investment up front.

To properly leverage the power of HPC to the manufacturing sector, we need to go back to that important activity — collaboration. We need to engage the end users who are demanding ever more complexity and flexibility from their supply chain. We need to engage the small- to medium-sized companies to allow them to develop the skills and expertise needed to utilize the power of HPC in their modeling and simulation activities, and we need to engage the public sector who can play a key role in supporting the introduction and integration of this technology into the manufacturing base. NCMS is a logical place for this collaboration to take place, and we see it as our national responsibility to bring these players together to make it work.

*Credit research by Karl Fisch, Scott McLeod, and Jeff Brenman (video)

About the Author

Rick Jarman, NCMSRick Jarman is the President & CEO of the National Center for Manufacturing Sciences (NCMS) the largest cross-industry collaborative manufacturing research consortium in the United States located in Ann Arbor, Mich. Prior to this position at NCMS, Mr. Jarman was director of technology partnerships at the Eastman-Kodak Company where he was a driving force to forge alliances with industry and government in order to improve commercialization processes through innovation and technology. Rick managed global relationships and programs with policy makers, partners, and consortia management in order to leverage synergistic and strategic partnerships. In 1988, he represented Kodak on the President's Commission on Executive Exchange. He played a key role on the trade committee during the Commission's meetings in the USSR and Western Europe and served as Special Assistant to the Assistant Secretary of Defense for Production and Logistics in the Pentagon. Rick serves on industry boards and advisory groups related to his work in building collaborative alliances. He is co-author of the book "Collaborative R&D: Manufacturing's New Tool" published by John Wiley & Sons N.Y.

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